NCPA - National Center for Policy Analysis

Not So Fast on the Overtime Rule, Says Judge

November 29, 2016

Senior Fellow Pam Villarreal writes at NCPA's Tax and Retirement blog:

Last week, a U.S. District judge issued a preliminary injunction against the Department of Labor's new overtime pay rule, scheduled to take effect on Thursday.  The rule doubles the threshold under which salaried employees are required to receive overtime pay.  The NCPA published two reports on the negative effects of this rule and potential job losses as a result.

According to Judge Amos Mazzant, the Department of Labor overstepped its authority by "raising the minimum salary level such that is supplants the duties test." (See opinion at Forbes) Part of Congress' original intent of overtime rules was to exempt workers in executive, administrative and professional positions.  In the DOL's Final Rule, according to Judge Mazzant, the duties test was virtually ignored as "ambiguous."  But he noted that one only needs to check the dictionary in order to determine the meanings of words, thus, there was no ambiguity in defining the duties test.

The "preliminary injuction" also applies to all employers nationwide who would be affected, not just those located in the 5th Circuit.

It will be interesting to see what happens with yet another controversial and overreaching Obama administration order.  The overtime rule, or at least this version of it, will likely be tossed aside under the Trump administration.


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